WSP&R
DRAFT
10/8/98
EXHIBIT (1)
Central Xxxxxx Gas & Electric Corporation
$___,000,000
Medium-Term Notes, Series __
DISTRIBUTION AGREEMENT
__________ ___, ____
New York, New York
[Agents' Names and Addresses]
Dear Sirs:
Central Xxxxxx Gas & Electric Corporation, a New York corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale by the Company of up to $___,000,000 aggregate principal amount of its
Medium-Term Notes, Series __ (the "Notes").
The Company proposes to issue the Notes under its Indenture (the
"Indenture") dated as of April 1, 1992 to U.S. Bank Trust National Association
(formerly known as First Trust of New York, National Association) ("U.S. Bank
Trust") as successor to Xxxxxx Guaranty Trust Company of New York, as trustee
(the "Trustee").
The Notes will be issued in minimum denominations of $1,000 and integral
multiples thereof (unless otherwise specified by the Company), will be issued
only in fully registered form and will have the annual interest rates,
maturities and, if appropriate, other terms set forth in a supplement or
supplements to the Prospectus referred to below. The Notes will be issued, and
the terms thereof established, in accordance with the Indenture and, in the case
of Notes sold pursuant to Section 2(a), the Administrative Procedures attached
hereto as Exhibit A (the "Procedures"). The Procedures may only be amended by
written agreement of the Company and you after notice to, and with the approval
of, the Trustee. For the purposes of this Agreement, the term "Agent" shall
refer to any of you acting solely in the capacity as agent for the Company
pursuant to Section 2(a) and not as principal (together, the "Agents"), the term
"Purchaser" shall refer to any of you acting solely as principal pursuant to
Section 2(b) and not as agent, and the
term "you" shall refer to you together at any time any of you is acting in both
such capacities or in either such capacity.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, you as set forth below in this Section 1. Certain terms used in
this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). The Company filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such Form (File No. 33-56349), which became effective, for the registration
under the Act of, among other things, up to $80,000,000 aggregate initial
offering price of debt securities and shares of the Company's common stock. With
$65,000,000 aggregate initial offering price of such securities remaining
registered but unissued under such registration statement, the Company filed
with the Commission a second registration statement on such Form (File No.
333-_____), which became effective, for the registration under the Act of an
additional $45,000,000 aggregate principal amount of debt securities. Said
second registration statement included a basic prospectus which pursuant to Rule
429 under the Act related to the $45,000,000 aggregate principal amount of debt
securities registered thereunder and the $65,000,000 aggregate initial offering
price of debt securities registered but unissued under the first registration
statement, in each case, including the Notes (such debt securities being
hereinafter collectively called the "Debt Securities"). Such registration
statements, as amended at the date of this Agreement, meet the requirements set
forth in Rule 415(a)(1)(ix) or (x) under the Act and comply in all other
material respects with said Rule. The Company has included in said second
registration statement, or has filed or will file with the Commission pursuant
to the applicable paragraph of Rule 424 under the Act, a supplement or
supplements to the form of prospectus included in such registration statement
relating to the Notes and the plan of distribution thereof (such supplement
being hereinafter called a "Prospectus Supplement"). In connection with the sale
of Notes, the Company proposes to file with the Commission pursuant to the
applicable paragraph of Rule 424 under the Act one or more further supplements
to the Prospectus Supplement providing for the specification of or a change in
the interest rates, if any, maturity dates, issuance prices, redemption terms
and prices, if any, and, if appropriate, other terms of the Notes sold pursuant
hereto or the offering thereof (any such supplement being hereinafter called a
"Pricing Supplement").
(b) At each of the following times: (i) as of the Execution Time, (ii)
on the Effective Date, (iii) when any supplement to the Prospectus is filed with
the Commission, (iv) as of the date of any Terms Agreement (as defined by
Section 2(b)) and (v) at the date of delivery by the Company of any Notes sold
hereunder (a "Closing Date"), (1) the Registration Statement, as amended as of
any such time, and the Prospectus, as supplemented as of any such time, the
Indenture, as amended or supplemented as of any such time, complied or will
comply in all material respects with the applicable requirements of the Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
respective rules thereunder; (2) the Registration Statement, as amended as of
any such time, did not or will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and (3) the Prospectus,
as supplemented as of any such time, will not include an untrue statement of a
material fact or omit to state a material fact necessary in
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order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the Company makes
no representations or warranties as to (A) that part of the Registration
Statement which shall constitute the Statements of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee, (B) any information
contained in any Prospectus Supplement relating to The Depository Trust Company
("DTC") or DTC's book-entry system or (C) the information contained in or
omitted from the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in
writing to the Company by any of you specifically for use in connection with the
preparation of the Registration Statement or the Prospectus (or any supplement
thereto).
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "Effective Date" shall mean the later of (i) each
date that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective or (ii) the time and date of the
filing of the Company's most recent Annual Report on Form 10-K. "Execution Time"
shall mean the date and time that this Agreement is executed and delivered by
the parties hereto. "Basic Prospectus" shall mean the form of basic prospectus
relating to the Debt Securities contained in the Registration Statement at the
Effective Date (unless such basic prospectus has been amended by the Company
subsequent to the Effective Date, in which case "Basic Prospectus" shall mean
the form of basic prospectus as so amended). "Prospectus" shall mean the Basic
Prospectus as supplemented by the Prospectus Supplement and as it may be further
amended or supplemented at the particular time referred to. "Registration
Statement" shall mean the registration statements referred to in paragraph (a)
above, including incorporated documents, exhibits and financial statements, as
they may be amended at the particular time referred to. "Rule 415" and "Rule
424" refer to such rules under the Act. Any reference herein to the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the issue date
of the Basic Prospectus, the Prospectus Supplement or the Prospectus, as the
case may be; and any reference herein to the terms "amend", "amended",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be,
deemed to be incorporated therein by reference.
(d) Neither the Company nor any of its Subsidiaries (as hereinafter
defined) has sustained since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which has had or is
reasonably likely to have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Registration Statement and the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
pursuant to any stock
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purchase, dividend reinvestment, savings, bonus, incentive, or similar plan,
conversions of convertible securities into common stock or shares of capital
stock issued or to be issued by any of the Subsidiaries pursuant to one or more
subscription agreements in effect between such Subsidiaries and the Company at
the date hereof) or long-term debt (other than any redemptions or purchases of
First Mortgage Bonds of the Company issued under its Indenture of Mortgage,
dated as of January 1, 1927, to The Bank of New York (under its then name
American Exchange Irving Trust Company), as heretofore and as may hereafter be
supplemented and amended ("First Mortgage Bonds"), normal amortization of debt
premium and discount, bank or finance company borrowings and repayments in the
ordinary course, or additional issuances or repurchases of commercial paper) of
the Company or its Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its Subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Registration Statement and the
Prospectus.
(e) Each of CH Resources, Inc., Central Xxxxxx Enterprises Corporation,
CH Energy Group, Inc., Phoenix Development Company, Inc., Xxxxxx Point
Development Corporation (collectively the "Subsidiaries") and the Company has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business requires such qualification except where the failure to be so
qualified, considering all such cases in the aggregate, does not involve a
material risk to the business, properties, financial position or results of
operations of the Company and its Subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially by the Company subject to no security interest, other encumbrance
or adverse claim. Notwithstanding the foregoing, if any corporation within the
definition of "Subsidiaries" herein as of the date hereof or any subsequent date
should hereafter or thereafter cease to be a subsidiary (within the meaning of
Rule 405 promulgated by the Commission under the Act) of the Company, such
corporation shall be deemed to be excluded from the definition of such term from
and after such date.
(f) The creation, issuance and sale of the Notes have been duly and
validly authorized by the Company and, when issued within the limitations set
forth in the orders of the Public Service Commission of the State of New York
referred to in subsection (g) below and executed and authenticated in accordance
with the provisions of the Indenture and delivered and paid for by the
purchasers thereof, the Notes will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the Indenture
equally and ratably with the securities outstanding thereunder; the Indenture
has been duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, to general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and to an implied covenant
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of good faith and fair dealing; and the Notes and the Indenture conform to the
descriptions thereof in the Registration Statement and the Prospectus.
(g) The issue and sale of the Notes and the compliance by the Company
with all of the provisions of the Notes, the Indenture, this Agreement and any
Terms Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or assets
of the Company is subject (except that, for purposes of this representation and
warranty, compliance with any financial covenant requiring an arithmetic
computation (not determinable at the Execution Time) in respect of any Notes
shall be measured at the time of the establishment of the terms of such Notes),
nor will such action result in any violation of the provisions of the Company's
Certificate of Incorporation, as amended, or the Bylaws of the Company or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its property or assets; and
no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Notes or the consummation by the Company of the other transactions
contemplated by this Agreement or any Terms Agreement or the Indenture except
such as have been obtained prior to the Execution Time under the Act and the
Trust Indenture Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in
connection with the public offering of the Notes, and except for filings with
and the orders from the Public Service Commission of the State of New York
authorizing the issuance and sale by the Company of the Notes subject to certain
conditions set forth therein, which orders have been obtained and are in full
effect.
(h) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any of
its Subsidiaries is a party or of which any property of the Company or any of
its Subsidiaries is the subject which, if determined adversely to the Company or
any of its Subsidiaries, would individually or in the aggregate have a material
adverse effect on the financial position, stockholders' equity or results of
operations of the Company and its Subsidiaries taken as a whole; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(i) There are no contracts or documents of the Company or any of its
Subsidiaries that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement by the
Act or by the rules and regulations thereunder that have not been so described
or filed.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS OF OFFERS TO PURCHASE;
SALES OF NOTES TO A PURCHASER. (a) Subject to the terms and conditions set forth
herein, the Company hereby authorizes, on an exclusive basis, each of the Agents
to act as its agent to solicit offers for the purchase of all or part of the
Notes from the Company. On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the Agents agrees,
as agent of the Company, to use its reasonable best efforts to solicit offers to
purchase the
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Notes from the Company upon the terms and conditions set forth in the Prospectus
(and any supplement thereto) and in the Procedures.
The Company reserves the right, in its sole discretion, to reject any offer
to purchase Notes, in whole or in part. In addition, the Company reserves the
right, in its sole discretion, to instruct the Agents to suspend at any time,
for any period of time or permanently, the solicitation of offers to purchase
the Notes. Upon receipt of instructions from the Company, the Agents will
forthwith suspend solicitations of offers to purchase Notes from the Company
until such time as the Company has advised them that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission on the Closing Date with
respect to each sale of Notes by the Company as a result of a solicitation made
by such Agent pursuant to this subsection, in an amount equal to that percentage
specified in Schedule I hereto of the aggregate principal amount of the Notes
sold by the Company. Such commission shall be payable as specified in the
Procedures.
Subject to the provisions of this Section 2 and to the Procedures, offers
for the purchase of Notes may be solicited by an Agent as agent for the Company
at such times and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
PROVIDED, HOWEVER, that so long as this Agreement shall be in effect the Company
shall not solicit or accept offers to purchase Notes through any agent other
than an Agent.
(b) Subject to the terms and conditions stated herein, whenever the
Company and any of you determine that the Company shall sell Notes directly to
any of you as Purchaser, each such sale of Notes shall be made in accordance
with the terms of this Agreement and, unless otherwise agreed by the Company and
the Purchaser, any supplemental agreement relating thereto between the Company
and the Purchaser. Each such supplemental agreement (which shall be
substantially in the form of Exhibit B hereto) is herein referred to as a "Terms
Agreement". The Purchaser's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Each Terms Agreement shall describe the Notes
to be purchased by the Purchaser pursuant thereto, specify the principal amount
of such Notes, the price to be paid to the Company for such Notes, the rate at
which interest will be paid on the Notes, the Closing Date for such Notes, the
place of delivery of the Notes and payment therefor, the method of payment and
any modification of the requirements for the delivery of the opinions of
counsel, the certificates from the Company or its officers, and the letter from
the Company's independent public accountants, pursuant to Section 6(b). Such
Terms Agreement shall also specify the period of time referred to in Section
4(m).
Delivery of the certificates for Notes sold to the Purchaser pursuant
to any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in the respective Terms Agreement, not later than the
Closing Date set forth in such Terms Agreement, against payment of funds to the
Company in the net amount due to the Company for such Notes by the method and in
the form set forth in the respective Terms Agreement.
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3. Offering and Sale of Notes.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by them in the Procedures.
4. AGREEMENTS. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the Company
will not file any amendment of the Registration Statement or supplement to the
Prospectus (except for (i) periodic or current reports filed under the Exchange
Act, (ii) a Pricing Supplement or (iii) a supplement relating to an offering of
Debt Securities other than the Notes) unless the Company has furnished each of
you a copy for your review prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or supplement. Subject to
the foregoing sentence, the Company will cause each supplement to the Prospectus
to be filed with the Commission pursuant to the applicable paragraph of Rule 424
within the time period prescribed. The Company will promptly advise each of you
(i) when the Prospectus, and any supplement thereto, shall have been filed with
the Commission pursuant to Rule 424, (ii) when, prior to the termination of the
offering of the Notes, any amendment of the Registration Statement shall have
been filed or become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or for
any additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
if it shall be necessary to amend the Registration Statement or to supplement
the Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (i) notify each of you to suspend
solicitation of offers to purchase Notes (and, if so notified by the Company,
each of you shall forthwith suspend such solicitation and cease using the
Prospectus as then supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request; PROVIDED, HOWEVER, that should any
such event relate solely to activities of you, then you shall assume the expense
of preparing and furnishing any such amendment or supplement. If such amendment
or supplement, and any documents, certificates and opinions furnished to each of
you pursuant to paragraph (g) of this Section 4 in connection with the
preparation of filing of such amendment or supplement are satisfactory in all
respects to you, you will, upon the filing of such amendment or supplement with
the Commission and upon the effectiveness of an
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amendment to the Registration Statement, if such an amendment is required,
resume your obligation to solicit offers to purchase Notes hereunder.
(c) During the term of this Agreement, the Company will timely file all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act. In addition, on the date on which the
Company (or as soon as practicable thereafter) makes any announcement to the
general public concerning earnings or concerning any other event which is
required to be described, or which the Company proposes to describe, in a
document filed pursuant to the Exchange Act, the Company will furnish to each of
you the information contained in such announcement. The Company will notify each
of you of any downgrading in the rating of the Notes or any other debt
securities of the Company, or any public announcement of placement of the Notes
or any other debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), promptly
after the Company learns of any such downgrading or public announcement.
(d) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its Subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel, without
charge (except as otherwise provided herein), a reasonable number of copies of
the Registration Statement (including exhibits thereto) and, so long as delivery
of a prospectus may be required by the Act, as many copies of the Prospectus and
any supplement thereto as you may reasonably request.
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as any of you may designate, will
maintain such qualifications in effect so long as required for the distribution
of the Notes, and upon your request will arrange for the determination of the
legality of the Notes for purchase by institutional investors; PROVIDED,
HOWEVER, that the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction, to pay filing fees and other expenses in connection therewith in
the aggregate exceeding $4,000, or to comply with any other requirement
reasonably deemed by the Company to be unduly burdensome.
(g) During the term of this Agreement, the Company shall furnish to
each of you (i) copies of all annual, quarterly and other reports furnished to
stockholders, (ii) copies of all annual, quarterly and current reports (without
exhibits but including documents incorporated by reference therein) of the
Company filed with the Commission under the Exchange Act and (iii) such other
information concerning the Company as you may reasonably request from time to
time.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof
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and supplements thereto, the Indenture, this Agreement and all other documents
relating to the offering, the cost of preparing, printing, packaging and
delivering the Notes, the fees and disbursements, including fees of counsel,
incurred pursuant to Section 4(f), the fees and disbursements of the Trustee and
the fees of any ratings agency that rates the Notes, (ii) reimburse each of you
on a monthly basis for all reasonable out-of-pocket expenses incurred by you in
connection with this Agreement (including, but not limited to, advertising
expenses), in the aggregate not to exceed $2,500 per Agent for the term of this
Agreement, and (iii) pay the reasonable fees and expenses of your counsel
incurred in connection with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes will
be deemed to be a new making to you of the representations and warranties of the
Company in Section 1 (except that such representations and warranties shall be
deemed to relate solely to the Registration Statement as then amended and to the
Prospectus as then amended and supplemented to relate to such Notes).
(j) Except as otherwise provided in subsection (n) of this Section 4,
each time that the Registration Statement or the Prospectus is amended or
supplemented (other than by (i) an amendment or supplement relating to any
offering of Debt Securities other than the Notes or (ii) a Pricing Supplement)
the Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by any of the Chairman of the Board, the
President and Chief Executive Officer, any Vice President having
responsibilities for financial matters or the Controller or the Treasurer of the
Company, dated the date of the effectiveness of such amendment or the date of
the filing of such supplement, in form reasonably satisfactory to you, of the
same tenor as the certificate referred to in Section 5(d) but modified to relate
to the last day of the fiscal quarter for which financial statements of the
Company were last filed with the Commission and to the Registration Statement
and the Prospectus as amended and supplemented to the time of the effectiveness
of such amendment or the filing of such supplement.
(k) Except as otherwise provided in subsection (n) of this Section 4,
each time that the Registration Statement or the Prospectus is amended or
supplemented (other than by (i) an amendment or supplement relating to any
offering of Debt Securities other than the Notes or (ii) a Pricing Supplement),
the Company shall furnish or cause to be furnished promptly to each of you a
written opinion of Xxxxx & Xxxxxx, counsel for the Company, satisfactory to each
of you, dated the date of the effectiveness of such amendment or the date of the
filing of such supplement, in form satisfactory to each of you, of the same
tenor as the opinion referred to in Section 5(b), but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement or,
in lieu of such opinion, such counsel may furnish each of you with a letter to
the effect that you may rely on such counsel's last opinion to the same extent
as though it were dated the date of such letter authorizing reliance (except
that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement).
(l) Except as otherwise provided in subsection (n) of this Section 4,
each time that the Registration Statement or the Prospectus is amended or
supplemented (other than by (i) an amendment or supplement relating to any
offering of Debt Securities other than the Notes or (ii) a Pricing Supplement)
to set forth amended or supplemental financial information (derived
9
from the accounting records of the Company subject to the internal controls of
the Company's accounting system or derived directly from such records by
computation), the Company shall cause its independent public accountants
promptly to furnish each of you a letter, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in form
satisfactory to each of you, of the same tenor as the letter referred to in
Section 5(e) with such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to the
date of such letter.
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser thereunder, issue
or announce the proposed issuance of any of its debt securities, including the
Notes, with maturities or other terms substantially similar to the Notes being
purchased pursuant to such Terms Agreement.
(n) The Company shall not be required to comply with the provisions of
subsections (j), (k) and (l) of this Section 4 during any period (which may
occur from time to time during the term of this Agreement) for which the Company
has instructed the Agents to suspend the solicitation of offers to purchase
Notes; PROVIDED that, during any such period, any Purchaser does not then hold
any Notes purchased pursuant to a Terms Agreement. Whenever the Company has
instructed the Agents to suspend the solicitation of offers to purchase Notes
for any such period, however, prior to instructing the Agents to resume the
solicitation of offers to purchase Notes or prior to entering into any Terms
Agreement, the Company shall be required to comply with the provisions of
subsections (j), (k) and (l) of this Section 4, but only to the extent of
delivering or causing to be delivered the most recent certificate, opinion or
letter, as the case may be, which would have otherwise been required under each
such subsection unless the Agents otherwise reasonably request that such
documents in respect of prior periods be delivered.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to (i) the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date and when any
supplement to the Prospectus is filed with the Commission, (ii) the accuracy of
the statements of the Company made in any certificates pursuant to the
provisions hereof, (iii) the performance by the Company of its obligations
hereunder and (iv) the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424, the Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424; and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to each Agent the opinion of Xxxxx
& Xxxxxx, counsel for the Company, dated the Execution Time, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with
10
power and authority (corporate and governmental) to own its properties
and conduct its business as described in the Prospectus, as amended or
supplemented, and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the
Company; PROVIDED, HOWEVER, that at such time, if ever, that the
Subsidiaries together constitute 10% or more of the consolidated
assets of the Company or contribute 10% or more of the consolidated
net income of the Company for the then most recent 12-month period,
the Agents may request that Xxxxx & Xxxxxx include in any written
opinion to them required by this Section 5(b) or Section 4(k) an
opinion to the effect that each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with power
and authority (corporate and governmental) to own its properties and
conduct its business as described in the Prospectus, as amended or
supplemented, and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the Company
and the Subsidiaries taken as a whole; and all of the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and
are owned beneficially by the Company subject to no security interest,
other encumbrance, or adverse claim.
(ii) To the best of such counsel's knowledge and other than as
set forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is the subject which, if determined
adversely to the Company, would individually or in the aggregate have
a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, to general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and to an implied
covenant of good faith and fair dealing; and the Indenture has been
duly qualified under the Trust Indenture Act.
(v) The creation, issuance and sale of the Notes have been duly
and validly authorized by the Company and, when issued within the
limitations set forth in the
11
applicable order or orders from the Public Service Commission of the
State of New York referred to in paragraph (x) below and executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof in accordance with
this Agreement, the Notes will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting the enforcement of creditors' rights generally, to
general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
to an implied covenant of good faith and fair dealing, and will be
entitled to the benefit provided by the Indenture equally and ratably
with the securities outstanding thereunder (except insofar as a
sinking fund established in accordance with the provisions of the
Indenture may afford additional benefit for the securities of any
particular series); and the Notes and the Indenture conform as to
legal matters to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(vi) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture and
this Agreement and the consummation of the transactions therein and
herein contemplated (except as to compliance with any financial
covenant requiring an arithmetic computation not determinable at the
Execution Time as to which such counsel need express no opinion) will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or material other agreement or
instrument known, as of the date of such opinion, to such counsel to
which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, nor
will such action result in any violation of the provisions of the
Company's Certificate of Incorporation, as amended, or the Bylaws of
the Company or any statute or any order, rule or regulation known, as
of the date of such opinion, to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties.
(vii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over the Company or any of its properties is
required for the issue and sale of the Notes or the consummation by
the Company of the other transactions contemplated by this Agreement
or the Indenture, except such as have been obtained under the Act and
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the public offering of
the Notes, and except for filings with and the orders from the Public
Service Commission of the State of New York authorizing the issuance
and sale by the Company of the Notes subject to certain conditions set
forth therein, which orders have been obtained and, to the best
knowledge of such counsel, are in full force and effect.
(viii) The Registration Statement, at the Effective Date, and the
Prospectus, as of the date of such opinion (except as to the financial
statements and other financial or statistical data contained or
incorporated by reference therein and except as to any information
contained in any Prospectus Supplement relating to DTC or DTC's
book-
12
entry system and except for that part of the Registration Statement
which shall constitute the Statements of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee, as to which
such counsel need express no opinion) comply as to form in all
material respects with all applicable requirements of the Act, and,
with respect to the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and incorporated by reference
in the Prospectus pursuant to Item 12 of Form S-3, the Exchange Act
and the applicable instructions, rules and regulations of the
Commission thereunder; on the basis of information received from the
Commission, at the date of such opinion, the Registration Statement
has become effective under the Act, and, to the best knowledge of such
counsel, no proceedings for a stop order with respect thereto have
been instituted or are pending or threatened under Section 8 of the
Act; and based on such counsel's participation in the preparation of
the Registration Statement and Prospectus and its services as general
counsel to the Company (but such opinion may state that such counsel
did not independently check or verify the correctness of the
statements made by the Company or factual information included in the
Registration Statement and Prospectus, and thereby may assume the
correctness thereof, except insofar as such statements or information
relate to such counsel or are stated in the Registration Statement or
Prospectus as having been made on their authority as experts), no
facts have come to the attention of such counsel to cause them to
believe, and such counsel have no reason to believe, that the
Registration Statement, at the Effective Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading (except as to the financial statements or other
financial or statistical data contained in or incorporated by
reference in the Registration Statement and the Prospectus, except as
to any information contained in any Prospectus Supplement relating to
DTC or DTC's book-entry system and except for that part of the
Registration Statement which shall constitute the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee), or that the Prospectus, as of the date of such
opinion, includes an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (except as to the financial statements or other
financial or statistical data contained in or incorporated by
reference in the Registration Statement and the Prospectus and except
as to any information contained in any Prospectus Supplement relating
to DTC or DTC's book-entry system).
(ix) The Company is not subject to the provisions of the Public
Utility Holding Company Act of 1935, except Section 9(a)(2) thereof;
and the Company's gas distribution activities are exempt from the
Natural Gas Act.
(x) The Public Service Commission of the State of New York has
issued an appropriate order or orders with respect to the issuance and
sale of the Notes in accordance with this Agreement; to the best
knowledge of such counsel, such orders are still in full force and
effect; the issuance and sale of the Notes in accordance with this
Agreement and subject to the limitations set forth in such orders will
conform with the terms of such orders.
13
As to factual matters (including relating to the Company's financial
condition) included in said opinion, such counsel may rely upon certificates of
public officials as of a recent date, the warranties and representations of the
Company set forth in this Agreement, and certificates of the Company made
pursuant to the provisions of this Agreement.
(c) Each Agent shall have received from Winthrop, Stimson, Xxxxxx &
Xxxxxxx, counsel for the Agents, an opinion, dated the Execution Time, with
respect to the issuance and sale of the Notes, the Indenture, the Registration
Statement, the Prospectus (together with any supplement thereto) and other
related matters as the Agents may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by any of the Chairman of the Board, the President and Chief
Executive Officer, any Vice President having responsibilities for financial
matters, the Controller or the Treasurer of the Company, dated the Execution
Time, to the effect that the signer of such certificate has carefully examined
the Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied as a condition to
the obligation of the Agents to solicit offers to purchase the Notes.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened.
(iii) (1) Neither the Company nor any of its Subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement
and the Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which has had or is reasonably likely to have a
material adverse effect on the financial position, stockholders'
equity or results of operations of the Company and its Subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus and (2) since the respective
dates as of which information is given in the Registration Statement
and the Prospectus, there has not been any change in the capital stock
(other than pursuant to any stock purchase, dividend reinvestment,
savings, bonus, incentive, or similar plan, conversions of convertible
securities into common stock, or shares of capital stock issued or to
be issued by any of the Subsidiaries pursuant to one or more
subscription agreements in effect between such Subsidiaries and the
Company at the date hereof), or long-term debt (other than any
redemptions or purchases of First Mortgage Bonds, normal amortization
of debt premium and discount, bank or finance company borrowings and
repayments in the ordinary course, or additional issuances or
repurchases of commercial paper) of the Company or
14
its Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its Subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Registration
Statement and the Prospectus.
(e) At the Execution Time, PricewaterhouseCoopers LLP shall have
furnished to each Agent a letter, dated as of the Execution Time, in form and
substance satisfactory to the Agents, stating in effect that:
(i) They are independent accountants with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder.
(ii) In their opinion the financial statements and schedules of
the Company included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, which are incorporated by reference
in the Prospectus and examined by such firm, comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act, and the respective published rules and
regulations thereunder.
(iii) On the basis of procedures (but not an audit in accordance
with generally accepted auditing standards) consisting of: (A) reading
the amounts included in the Annual Report appearing in the table
captioned "Five-Year Summary of Consolidated Operations and Selected
Financial Information" for the five years ended December 31, 1997 (the
"Audited Amounts") which were derived from the financial statements
for such years as examined by such accountants (the "Audited
Statements"), (B) performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the unaudited condensed interim financial statements
of the Company included in the Registration Statement and the
Prospectus (the "Unaudited Statements"), and reading any more recent
unaudited interim financial data of the Company, (C) reading the
minutes of meetings of the shareholders, Board of Directors and
Committees of the Board of Directors of the Company held during the
period from December 31, 1997 as set forth in the minutes book through
a specified date not more than five business days prior to the date of
such letter; and (D) making inquiries of certain officials of the
Company who have responsibility for financial and accounting matters
regarding the specific items for which representations are requested
in Sections 5(e)(iii)(1) to 5(e)(iii)(4), nothing has come to their
attention as a result of the foregoing procedures that caused them to
believe that:
(1) the Unaudited Statements incorporated by
reference in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in Quarterly
Reports on Form 10-Q under the Exchange Act; or
15
that any material modifications should be made to said
Unaudited Statements for them to be in conformity with
generally accepted accounting principles;
(2) the Audited Amounts were not derived from the
Audited Statements;
(3) at the date of the latest available monthly
unconsolidated balance sheet (as adjusted to reflect the
relevant activity of the Subsidiaries through said date) of
the Company read by such accountants, there was any change in
the capital stock or long-term debt of the Company, or any
decrease in the total shareholders' equity, as compared with
amounts shown on the latest balance sheet included in the
Audited Statements, except, in all instances, for changes or
decreases which are described in such letter; or
(4) for the period subsequent to the date of the
Audited Statements to the date of the latest available monthly
unconsolidated income statement (as adjusted to reflect the
relevant activity of the Subsidiaries through said date) of
the Company read by such accountants, there were any
decreases, as compared with the corresponding period of the
previous year, in total operating revenues or net income of
the Company, except, in all instances, for changes or
decreases which are described in such letter.
(iv) They have compared certain dollar amounts (or percentages
derived from such dollar amounts) and other financial information
specified by the Agents (A) which appear in the Prospectus under the
caption "Ratios of Earnings to Fixed Charges", (B) which appear or are
incorporated by reference in the Company's Annual Report on Form 10-K
incorporated by reference in the Registration Statement and the
Prospectus under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" or (C) which appear in
any of the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Registration Statement and the Prospectus under the
captions "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Ratios of Earnings to Fixed Charges"
(in each case to the extent that such dollar amounts, percentages and
other financial information are derived from the accounting records of
the Company subject to the internal controls of the Company's
accounting system or are derived directly from such records by
computation) to the accounting records of the Company or schedules
prepared from data in such records and have found such dollar amounts,
percentages and other financial information to be in agreement.
References to the Prospectus in this paragraph (e) include any supplement
thereto at the date of the letter.
(f) Each Agent shall have received copies of the Letters of
Representations between the Company, U.S. Bank Trust and DTC, satisfactory to
each of you, summarizing DTC's agreement to hold, safekeep and effect book-entry
transfers of the Notes.
16
(g) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions of
counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the Agents.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 at the Execution
Time shall be delivered at the office of Xxxxx & Xxxxxx, Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
6. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The obligations of the
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
of any related Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) If specified by any related Terms Agreement and except to the
extent modified by such Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d), (ii) the opinion of Xxxxx &
Xxxxxx, counsel for the Company, dated as of the Closing Date, substantially to
the effect set forth in Section 5(b), (iii) the opinion of Winthrop, Stimson,
Xxxxxx & Xxxxxxx, counsel for the Purchaser, dated as of the Closing Date,
substantially to the effect set forth in Section 5(c) and (iv) the letter of
PricewaterhouseCoopers LLP, independent public accountants for the Company,
dated as of the Closing Date, substantially to the effect set forth in Section
5(e); PROVIDED, HOWEVER, that references to the Registration Statement and the
Prospectus in such certificate, opinions and letter shall be to the Registration
Statement and the Prospectus as then amended and supplemented.
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement and
any Terms Agreement, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the Purchaser
17
thereunder and with respect to the Notes subject thereto may be canceled at, or
any time prior to, the respective Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO PURCHASE. The
Company agrees that any person who has agreed to purchase and pay for any Note,
including a Purchaser and any person who purchases pursuant to a solicitation by
any of the Agents, shall have the right to refuse to purchase such Note if, at
the Closing Date therefor, either (a) any condition set forth in Section 5 or 6,
as applicable, shall not be satisfied or (b) subsequent to the agreement to
purchase such Note, there shall have occurred (i) any change in or affecting the
business or properties of the Company and its Subsidiaries, considered as one
enterprise, the effect of which, in the reasonable judgment of such person, has
a material adverse effect on the investment quality of such Note or (ii) any
event described in paragraphs (ii), (iii), (iv) or (v) of Section 9(b).
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless each of you against all losses, claims, damages or liabilities,
joint or several, to which you may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
and any other prospectus relating to the Notes, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each of you for any
legal or other expenses reasonably incurred by each of you in connection with
investigating or defending any such action or claim; PROVIDED, HOWEVER, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus and any other prospectus relating to the Notes or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any of you expressly for use in the
Prospectus.
(b) Each of you, severally, will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus and any other prospectus relating to
the Notes, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
preliminary prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus and any other prospectus relating to the Notes, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by each of you, respectively, expressly for
use therein; and will reimburse the Company for any
18
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. Any losses, claims, damages or liabilities for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages or liabilities are incurred.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and you on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as other
equitable considerations, including relative fault. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or you on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if you were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. In connection
with an offering of Notes purchased from the Company by two or more Agents as
principal, the respective obligations of such Agents to contribute pursuant to
this Section 8(d) are several, and not joint, in proportion to
19
the aggregate principal amount of Notes that each Agent has agreed to purchase
from the Company.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any who controls any of
you within the meaning of the Act or the Exchange Act; and the obligations of
you under this Section 8 shall be in addition to any liability which you may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
9. TERMINATION. (a) This Agreement will continue in effect until terminated
as provided in this Section 9. This Agreement may be terminated by either the
Company as to any of you or any of you insofar as this Agreement relates to such
of you, giving written notice of such termination to such of you or the Company,
as the case may be. This Agreement shall so terminate at the close of business
on the first business day following the receipt of such notice by the party to
whom such notice is given. In the event of such termination, no party shall have
any liability to the other party hereto, except as provided in the third
paragraph of Section 2(a), Section 4(d), Section 4(h), Section 8 and Section 10
and, so long as any Agent continues to own Notes purchased from the Company by
such Agent pursuant to a Terms Agreement, subsections (a), (b) and (c) of
Section 4.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if prior to such
time (i) the Purchaser shall exercise its right to refuse to purchase the Notes
which are the subject of such Terms Agreement in accordance with the provisions
of Section 7, or (ii) there shall have occurred any outbreak or escalation of
hostilities or other national or international calamity or crisis, the effect of
which shall be such as to make it, in the reasonable judgment of the Purchaser,
impractical to market the Notes or enforce contracts for the sale of the Notes,
or (iii) trading in any securities of the Company shall have been suspended by
the Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange shall have
been suspended, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required, by either
of said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium shall have been declared by either Federal
or New York authorities, or (iv) if the rating assigned by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act) to the Notes or any other debt securities of the Company
as of the date of the applicable Terms Agreement shall have been lowered since
that date or if any such rating agency shall have publicly announced that it has
placed the Notes or any other debt securities of the Company on what is commonly
termed a "watch list" for possible downgrading, or (v) the subject matter of any
amendment or supplement to the Registration Statement or the Prospectus prepared
and issued by the Company, or the exceptions set forth in any letter of
PricewaterhouseCoopers LLP furnished pursuant to Section 5(e) hereof, shall have
made it, in the judgment of the Purchaser, impracticable or inadvisable to
market the Notes or enforce contracts for the sale of the Secured Notes or the
Unsecured Notes.
20
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Notes. The provisions of the third paragraph of Section 2(a) and
Sections 4(d), 4(h) and 8 hereof shall survive the termination or cancellation
of this Agreement; PROVIDED, HOWEVER, that if at the time of such termination or
cancellation any Agent continues to own Notes purchased from the Company by such
Agent pursuant to a Terms Agreement, the provisions of subsections (a), (b) and
(c) of Section 4 shall also survive such termination or cancellation of this
Agreement.
11. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to any of you, will be mailed, delivered or
telegraphed and confirmed to such of you, at the address specified in Schedule I
hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx 00000-0000,
Attention: Treasurer.
12. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
14. COUNTERPARTS. This Agreement may be executed in counterparts, which
together shall constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and you.
Very truly yours,
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
By:_______________________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
_________________________________
By:______________________________
Title:
_________________________________
By:______________________________
Title:
_________________________________
By:______________________________
Title:
22
SCHEDULE I
COMMISSIONS:
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:
TERM COMMISSION RATE
---- ---------------
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years up to and including 30 years .750%
ADDRESS FOR NOTICE TO YOU:
Notices to ________________, shall be directed to it at________________
__________________________, attention of ________________, _____________
Notices to ______________, shall be directed to it at ___________________
________________________, attention of ________________, ______________
Notices to _______________, shall be directed to it at ___________________
__________________________, attention of ______________, _____________.
WSPR
DRAFT
10/8/98
EXHIBIT A
Central Xxxxxx Gas & Electric Corporation
Medium-Term Notes, Series __
Administrative Procedures
Medium-Term Notes, Series C (the "Notes"), are to be offered on a
continuing basis by Central Xxxxxx Gas & Electric Corporation (the "Company").
_________________________, _____________________, and ______________________,
as agents (each an "Agent" and collectively the "Agents"), have agreed to use
their reasonable best efforts to solicit offers to purchase the Notes. The Notes
are being sold pursuant to a Distribution Agreement between the Company and the
Agents dated __________ ___, ____ (the "Distribution Agreement"), to which these
administrative procedures are attached as an exhibit.
The Notes will be issued under the Company's Indenture, dated as of April
1, 1992 (the "Indenture"), to U.S. Bank Trust National Association (formerly
known as First Trust of New York, National Association) ("U.S. Bank Trust"), as
successor to Xxxxxx Guaranty Trust Company of New York, as trustee (the
"Trustee"). U.S. Bank Trust will act as the paying agent (the "Paying Agent")
for the payment of principal and premium, if any, and interest on the Notes and
will perform, as the Paying Agent, unless otherwise specified, the other duties
specified herein.
The Notes will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company. The Notes have been registered with
the Securities and Exchange Commission (the "Commission") and will bear interest
at either fixed rates ("Fixed Rate Notes") or variable rates ("Floating Rate
Notes").
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to U.S. Bank Trust, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the holder thereof or a person
designated by such holder (a "Certificated Note"). Except as set forth in the
Prospectus (as defined in Section 1(c) of the Distribution Agreement), (i) each
Note will be initially issued as a Book-Entry Note and (ii) an owner of a
Book-Entry Note will not be entitled to receive a certificate representing such
Note.
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are explained below. Book-Entry Notes will be issued in accordance with
the administrative procedures set forth in Part I hereof and Certificated Notes
will be issued in accordance with the administrative procedures set forth
A-1
in Part II hereof. Administrative procedures applicable to both Book-Entry Notes
and Certificated Notes are set forth in Part III hereof. Administrative
responsibilities, document control and record-keeping functions will be handled
for the Company by its Controller or Treasurer. The Company will promptly advise
the Agents and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents and the Trustee are to communicate
regarding offers to purchase Notes and the details of their delivery.
To the extent the procedures set forth below conflict with the provisions
of the Notes, the Indenture or the Distribution Agreement, the relevant
provisions of the Notes, the Indenture and the Distribution Agreement shall
control. Unless otherwise defined herein, terms defined in the Indenture shall
be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, U.S. Bank Trust will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Letter of
Representations to be delivered from the Company and U.S. Bank Trust to DTC and
a Medium-Term Note Certificate Agreement between U.S. Bank Trust National
Association (under its then name First Trust, National Association) and DTC,
dated as of [January 31, 1991] (the "MTN Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
ISSUANCE: On any date of settlement (as defined under
"Settlement" below) for one or more
Book-Entry Notes, the Company will issue a
single global security in fully registered
form without coupons (a "Global Security")
representing up to $___,000,000 principal
amount of all such Notes that have the same
date of maturity ("Maturity Date"),
redemption provisions, if any, provisions
for the repayment or purchase by the Company
at the option of the Holder, if any,
Interest Payment Dates, Original Issue Date,
and, in the case of Fixed Rate Notes,
interest rate, and, in the case of Floating
Rate Notes, Initial Interest Rate, Base
Rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Rate Determination
Dates, Interest Payment Period, Spread or
Spread Multiplier, if any, Minimum Interest
Rate, if any, and Maximum Interest Rate, if
any (in each case, and for all purposes of
these administrative procedures, as defined
in the Prospectus) (as defined in Section
1(c) of the Distribution Agreement)
(collectively, the "Terms"). Each Global
Security will be dated and issued as of the
date of its authentication by the Trustee.
No Global Security will represent any
Certificated Note.
IDENTIFICATION NUMBERS: The Company has arranged with the CUSIP
Service Bureau of Standard & Poor's Rating
Services, a division of The XxXxxx-Xxxx
Companies, Inc. (the "CUSIP Service Bureau")
for the reservation
A-2
of one series of CUSIP numbers (including
tranche numbers), which series consists of
approximately 900 CUSIP numbers and relates
to Global Securities representing the
Book-Entry Notes and previously issued
Medium-Term Notes of the Company. The
Company has obtained from the CUSIP Service
Bureau a written list of such series of
reserved CUSIP numbers and has delivered to
DTC and the Trustee a written list of 900
CUSIP numbers of such series. The Company
will assign CUSIP numbers to Global
Securities as described below under
Settlement Procedure "B". It is expected
that DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers
that the Company has assigned to Global
Securities. At any time when fewer than 100
of the reserved CUSIP numbers of the series
remain unassigned to Global Securities, the
Trustee shall so advise the Company and, if
it deems necessary, the Company will reserve
additional CUSIP numbers for assignment to
Global Securities representing Book-Entry
Notes. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of
such additional CUSIP numbers to the Trustee
and DTC.
REGISTRATION: Each Global Security will be registered in
the name of Cede & Co., as nominee for DTC,
on the Security Register maintained under
the Indenture. It is expected that the
beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC
designated by such owner) will designate one
or more participants in DTC (with respect to
such Note, the "Participants") to act as
agent or agents for such owner in connection
with the book-entry system maintained by
DTC, and it is expected that DTC will record
in book-entry form, in accordance with
instructions provided by such Participants,
a credit balance with respect to such
beneficial owner in such Note in the account
of such Participants. The ownership interest
of such beneficial owner in such Note will
be recorded through the records of such
Participants or through the separate records
of such Participants and one or more
indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferees and transferors of
such Note.
CONSOLIDATIONS: Upon receipt of written instructions from
the Company, U.S. Bank Trust may deliver to
DTC and the CUSIP Service Bureau at any time
a written notice of consolidation (a copy of
which shall be attached to the resulting
Global Security) specifying (i) the CUSIP
numbers of two or more Outstanding Global
Securities that represent Book-Entry Notes
having the same Terms and for which
A-3
interest has been paid to the same date,
(ii) a date, occurring at least thirty days
after such written notice is delivered and
at least thirty days before the next
Interest Payment Date for such Book-Entry
Notes, on which such Global Securities shall
be exchanged for a single replacement Global
Security and (iii) a new CUSIP number to be
assigned to such replacement Global
Security. Upon receipt of such a notice, it
is expected that DTC will send to its
participants (including U.S. Bank Trust) a
written reorganization notice to the effect
that such exchange will occur on such date.
Prior to the specified exchange date, U.S.
Bank Trust will deliver to the CUSIP Service
Bureau a written notice setting forth such
exchange date and the new CUSIP number and
stating that, as of such exchange date, the
CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the
specified exchange date, U.S. Bank Trust
will exchange such Global Securities for a
single Global Security bearing the new CUSIP
number, and the CUSIP numbers of the
exchanged Global Securities will, in
accordance with CUSIP Service Bureau
procedures, be canceled and not reassigned
until the Book-Entry Notes represented by
such exchanged Global Securities have
matured or been redeemed.
MATURITIES: Each Book-Entry Note will mature on a date
not less than one year nor more than 30
years after the date of settlement for such
Note.
DENOMINATIONS: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess
thereof that is an integral multiple of
$1,000. Global Securities will be
denominated in principal amounts not in
excess of $110,000,000.
INTEREST: GENERAL. Interest on each Book-Entry Note
will accrue from and including the original
issue date of, or the last date to which
interest has been paid on, the Global
Security representing such Note. Each
payment of interest on a Book-Entry Note
will include interest accrued to but
excluding the Interest Payment Date
(provided that, in the case of Floating Rate
Notes that reset daily or weekly, interest
payments will include interest accrued to
but excluding the Regular Record Date (as
defined below) immediately preceding the
Interest Payment Date) or the Maturity Date
or, upon earlier redemption or repayment,
the date of such redemption or repayment
(the "Redemption Date"), as the case may be.
Interest payable on the Maturity Date or the
Redemption Date of a Book-Entry Note will be
payable to the person to whom the principal
of such Note is payable. Standard & Poor's
Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc. will use the
information received in the pending deposit
message described under Settlement Procedure
"C" below in order to include the
A-4
amount of any interest payable and certain
other information regarding the related
Global Security in the appropriate weekly
bond report published by Standard & Poor's
Corporation.
RECORD DATES. The record date with respect
to any Interest Payment Date shall be the
December 15 or June 15, as the case may be
(whether or not a Business Day) immediately
preceding such Interest Payment Date (each a
"Regular Record Date").
FIXED RATE BOOK-ENTRY NOTES. Interest
payments on Fixed Rate Book-Entry Notes will
be made semi-annually on January 1 and July
1 of each year and on the Maturity Date or
the Redemption Date; PROVIDED, HOWEVER, that
in the case of a Fixed Rate Book-Entry Note
issued between a Regular Record Date and an
Interest Payment Date, the first interest
payment will be made on the Interest Payment
Date following the next succeeding Regular
Record Date.
FLOATING RATE BOOK-ENTRY NOTES. Interest
payments will be made on Floating Rate
Book-Entry Notes monthly, quarterly,
semi-annually or annually. Unless otherwise
agreed upon, interest will be payable, in
the case of Floating Rate Book-Entry Notes
with a monthly Interest Payment Period, on
the third Wednesday of each month; with a
quarterly Interest Payment Period, on the
third Wednesday of March, June, September
and December of each year; with a
semi-annual Interest Payment Period, on the
third Wednesday of the two months specified
pursuant to Settlement Procedure "A" below;
and with an annual Interest Payment Period,
on the third Wednesday of the month
specified pursuant to Settlement Procedure
"A" below; PROVIDED, HOWEVER, that if an
Interest Payment Date for Floating Rate
Book-Entry Notes would otherwise be a day
that is not a Business Day (as defined in
the Prospectus) with respect to such
Floating Rate Book-Entry Notes, such
Interest Payment Date will be the next
succeeding Business Day with respect to such
Floating Rate Book-Entry Notes, except in
the case of a Floating Rate Book-Entry Note
for which the rate base is LIBOR, if such
Business Day is in the next succeeding
calendar month, in which event such Interest
Payment Date will be the immediately
preceding Business Day; PROVIDED FURTHER,
HOWEVER, that in the case of a Floating Rate
Book-Entry Note issued between a Regular
Record Date and an Interest Payment Date the
first interest payment will be made on the
Interest Payment Date following the next
succeeding Regular Record Date.
PAYMENTS OF PRINCIPAL PAYMENT OF INTEREST ONLY. Promptly after
AND INTEREST: each Regular Record Date, the Paying Agent
will deliver to the Company and DTC a
written notice specifying by CUSIP number
the amount of interest
A-5
to be paid on each Global Security on the
following Interest Payment Date (other than
an Interest Payment Date coinciding with the
Maturity Date) and the total of such
amounts. It is expected that DTC will
confirm the amount payable on each Global
Security on such Interest Payment Date by
reference to the appropriate (daily or
weekly) bond reports published by Standard &
Poor's Corporation. The Company will pay to
the Paying Agent the total amount of
interest due on such Interest Payment Date
(other than on the Maturity Date), and the
Paying Agent will pay such amount to DTC at
the times and in the manner set forth under
"Manner of Payment" below. If any Interest
Payment Date for a Book-Entry Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day, except that, if such Note is a
LIBOR Note and such next succeeding Business
Day is in the next succeeding calendar
month, such payment will be made on the
immediately preceding Business Day; and no
interest shall accrue on such payment for
the period from and after such Interest
Payment Date.
PAYMENTS ON MATURITY DATE, ETC. On or about
the first Business Day of each month, the
Paying Agent will deliver to the Company and
DTC a written list of principal and, to the
extent known at such time, interest to be
paid on each Global Security maturing either
on the Maturity Date or the Redemption Date
in the following month. The Company and DTC
will confirm with the Paying Agent the
amounts of such principal and interest
payments with respect to each such Global
Security on or about the fifth Business Day
preceding the Maturity Date or the
Redemption Date, as the case may be, of such
Global Security. The Company will pay to the
Paying Agent the principal amount of such
Global Security, together with interest due
on such Maturity Date or Redemption Date in
the manner set forth below under "Manner of
Payment". The Paying Agent will pay such
amounts to DTC at the times and in the
manner set forth below under "Manner of
Payment". If the Maturity Date or the
Redemption Date of a Global Security
representing Book-Entry Notes is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day, except that, if such Note is a
LIBOR Note and such next succeeding Business
Day is in the next succeeding calendar
month, such payment will be made on the
immediately preceding Business Day; and no
interest shall accrue on such payment for
the period from and after such Maturity Date
or the Redemption Date. Promptly after
payment to DTC of the principal and interest
due at the Maturity Date or the Redemption
Date of such Global Security, the Paying
Agent will cancel such Global Security in
accordance with the terms of the Indenture.
A-6
MANNER OF PAYMENT. The total amount of any
principal and interest due on Global
Securities on any Interest Payment Date or
on the Maturity Date or the Redemption Date
shall be paid by the Company to the Paying
Agent in immediately available funds for use
by the Paying Agent no later than 9:30 A.M.
(New York City time) on such date. The
Company will make such payment on such
Global Securities by wire transfer to the
Paying Agent or by the Paying Agent's
debiting the account of the Company
maintained with the Paying Agent. The
Company will confirm such instructions in
writing to the Paying Agent. Prior to 10:00
A.M. (New York City time) on each Maturity
Date or Redemption Date or as soon as
reasonably possible thereafter, the Paying
Agent will pay by separate wire transfer
(using Fedwire message entry instructions in
a form previously agreed to with DTC) to an
account at the Federal Reserve Bank of New
York previously agreed to with DTC, in funds
available for immediate use by DTC, each
payment of principal (together with interest
thereon) due on Global Securities on any
Maturity Date or Redemption Date. On each
Interest Payment Date, interest payments
shall be made to DTC in same day funds in
accordance with existing arrangements
between the Paying Agent and DTC.
Thereafter, on each such date, it is
expected that DTC will pay, in accordance
with its SDFS operating procedures then in
effect, such amounts in funds available for
immediate use to the respective Participants
in whose names the Book-Entry Notes
represented by such Global Securities are
recorded in the book-entry system maintained
by DTC. Neither the Company nor the Paying
Agent shall have any responsibility or
liability for the payment by DTC to such
Participants of the principal of and
interest on the Book-Entry Notes.
WITHHOLDING TAXES. The amount of any taxes
required under applicable law to be withheld
from any interest payment on a Book-Entry
Note will be determined and withheld by the
Participant, indirect participant in DTC or
other person responsible for forwarding
payments and materials directly to the
beneficial owner of such Note.
SETTLEMENT: The receipt by the Company of immediately
available funds in payment for a Book-Entry
Note and the authentication and issuance of
the Global Security representing such Note
shall constitute "settlement" with respect
to such Note. All orders accepted by the
Company will be settled on the third
Business Day following the date of sale of a
Book-Entry Note unless the Company, the
Trustee and the purchaser agree to
settlement on another day that shall be no
earlier than the next Business Day.
A-7
SETTLEMENT PROCEDURES: Settlement Procedures with regard to each
Book-Entry Note sold by the Company through
an Agent, as agent, shall be as follows:
A. Such Agent will advise the Company by
telephone, followed by facsimile
transmission, of the following
settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate
Book-Entry Note, the interest
rate, or, in the case of a
Floating Rate Book-Entry Note,
the Initial Interest Rate (if
known at such time), Base Rate,
Index Maturity, Interest Reset
Period, Interest Reset Dates,
Rate Determination Dates,
Interest Payment Period, Spread
or Spread Multiplier (if any),
Minimum Interest Rate (if any)
and Maximum Interest Rate (if
any).
4. Interest Payment Dates.
5. Redemption provisions, if any,
or provisions for the repayment
or purchase by the Company at
the option of the Holder, if
any.
6. Settlement date.
7. Issue price.
8. Agent's commission, determined
as provided in Section 2(a) of
the Distribution Agreement.
B. The Company will assign a CUSIP number
to such Book-Entry Note and will
advise U.S. Bank Trust by facsimile
transmission or other mutually
acceptable means of the information
set forth in Settlement Procedure "A"
above, the name of such Agent and the
CUSIP number assigned to such
Book-Entry Note. The Company will
notify the Agent of such CUSIP number
by telephone as soon as practicable.
Each such communication by the Company
shall constitute a representation and
warranty by the Company to U.S. Bank
Trust and each Agent that (i) such
Note is then, and at the time of
issuance and sale thereof will be,
duly authorized for issuance and sale
by the Company, (ii) the Global
Security representing such Note will
conform with the terms of the
Indenture pursuant to which such Note
and Global Security are issued and
(iii) upon authentication and delivery
of such
A-8
Global Security, the aggregate
principal amount of all Notes
initially offered issued under the
Indenture will not exceed $---,000,000
(except for Global Securities or Notes
represented by and authenticated and
delivered in exchange for or in lieu
of Notes in accordance with the
Indenture).
C. U.S. Bank Trust will enter a pending
deposit message through DTC's
Participant Terminal System, providing
the following settlement information
to DTC, which shall route such
information to such Agent and Standard
& Poor's Rating Servies, a division of
The XxXxxx-Xxxx Companies, Inc.:
1. The information set forth in
Settlement Procedure "A".
2. Identification of such Note as a
Fixed Rate Book-Entry Note or a
Floating Rate Book-Entry Note.
3. Initial Interest Payment Date
for such Note, number of days by
which such date succeeds the
related Regular Record Date
(which, in the case of Floating
Rate Notes that reset daily or
weekly, shall be the DTC Record
Date, which is the date five
calendar days immediately
preceding the applicable
Interest Payment Date and, in
the case of all other Notes,
shall be the Regular Record Date
as defined in the Note) and
amount of interest payable on
such Interest Payment Date.
4. CUSIP number of the Global
Security representing such Note.
5. Whether such Global Security
will represent any other
Book-Entry Note (to the extent
known at such time).
D. The Trustee will complete and
authenticate the Global Security
representing such Note.
E. It is expected that DTC will credit
such Note to U.S. Bank Trust's
participant account at DTC.
F. U.S. Bank Trust will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC to (i) debit such Note
to U.S. Bank Trust's participant
account and credit such Note to such
Agent's participant account and (ii)
debit such Agent's settlement account
and credit U.S. Bank Trust's
settlement account for an amount equal
to the price of such Note less such
Agent's commission. The entry of such
a deliver order shall constitute a
representation and warranty
A-9
by U.S. Bank Trust to DTC that (a) the
Global Security representing such
Book-Entry Note has been issued and
authenticated and (b) U.S. Bank Trust
is holding such Global Security
pursuant to the MTN Certificate
Agreement.
G. Such Agent will enter an SDFS deliver
order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Note to such Agent's
participant account and credit such
Note to the participant accounts of
the Participants with respect to such
Note and (ii) to debit the settlement
accounts of such Participants and
credit the settlement account of such
Agent for an amount equal to the price
of such Note.
H. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures "F" and "G" will
be settled in accordance with SDFS
operating procedures in effect on the
settlement date.
I. U.S. Bank Trust will, upon confirming
receipt of such funds from the Agent,
wire transfer to the account of the
Company maintained at The Bank of Xxx
Xxxx, Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (for credit to Central Xxxxxx
Gas & Electric Corporation, The Bank
of New York - Special Acct. #2, ABA
Routing No.: 000000000J Account No.
8751004282) in immediately available
funds in the amount transferred to
Xxxxxx in accordance with Settlement
Procedure "F". Promptly upon
completion of such wire transfer, U.S.
Bank Trust shall notify the Company
thereof by telephone (Attn. Xxxxx
Xxxxxx, tel. No. 000-000-0000, or such
other person or telephone number as
the Company shall request of U.S. Bank
Trust).
J. Such Agent will confirm the purchase
of such Note to the purchaser either
by transmitting to the Participants
with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system or
by mailing a written confirmation to
such purchaser.
SETTLEMENT PROCEDURES For orders of Book-Entry Notes solicited
TIMETABLE: by an Agent, as agent, and accepted by the
Company for settlement on the first Business
Day after the sale date, Settlement
Procedures "A" through "J" set forth above
shall be completed as soon as possible but
not later than the respective times (New
York City time) set forth below:
A-10
SETTLEMENT
PROCEDURE TIME
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 5:00 P.M. on the sale date
D 3:00 P.M. on the sale date
E 8:05 A.M. on the settlement date
F-G 3:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable but no
later than 11:00 A.M. and 12:00 Noon on the
first Business Day after the sale date with
respect to Settlement Procedures "A" and
"B", respectively, and no later than 5:00
P.M. on the first Business Day after the
sale date, with respect to Settlement
Procedure "C". If the Initial Interest Rate
for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement
Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as
soon as such rate has been determined but no
later than 12:00 Noon and 2:00 P.M.,
respectively, on the second Business Day
before the settlement date. Settlement
Procedure "D" shall occur no later than 3:00
P.M. on the last Business Day prior to the
settlement date. Settlement Procedures "H"
and "I" are subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in the SDFS operating procedures
in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Company will
instruct U.S. Bank Trust by no later than
12:00 Noon on the Business Day immediately
preceding the scheduled settlement date to
deliver to DTC through DTC's Participant
Terminal System a cancellation message to
such effect and U.S. Bank Trust will enter
such message, by no later than 2:00 P.M. on
such Business Day, through DTC's
Participation Terminal System.
MONTHLY REPORTS: Monthly, the Trustee will send to the
Company a statement setting forth the
principal amount of Notes outstanding as of
that date under the Indenture and setting
forth a brief description of any sales of
which the Company has advised the Trustee
but which have not yet been settled.
FAILURE TO SETTLE: If U.S. Bank Trust or the Agent fails to
enter an SDFS deliver order with respect to
a Book-Entry Note pursuant to Settlement
A-11
Procedure "F" or "G," U.S. Bank Trust may
upon the approval of the Company deliver to
DTC, through DTC's Participant Terminal
System, as soon as practicable, a withdrawal
message instructing DTC to debit such Note
to U.S. Bank Trust's participant account,
provided that U.S. Bank Trust's participant
account contains a principal amount of the
Global Security representing such Note that
is at least equal to the principal amount to
be debited. If a withdrawal message is
processed with respect to all the Book-Entry
Notes represented by a Global Security, U.S.
Bank Trust will xxxx such Global Security
"canceled", make appropriate entries in U.S.
Bank Trust's records and send such canceled
Global Security to the Company. The CUSIP
number assigned to such Global Security
shall, in accordance with CUSIP Service
Bureau procedures, be canceled and not
reassigned until the Book-Entry Notes
represented by such Global Security have
matured or been redeemed. If a withdrawal
message is processed with respect to one or
more, but not all, of the Book-Entry Notes
represented by a Global Security, U.S. Bank
Trust will exchange such Global Security for
another Global Security, which shall
represent the Book-Entry Notes previously
represented by the surrendered Global
Security with respect to which a withdrawal
message has not been processed and shall
bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on
behalf of such purchaser), such Participants
and, in turn, the Agent for such Note may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures "G" and "F", respectively.
Thereafter, U.S. Bank Trust will deliver the
withdrawal message and take the related
actions described in the preceding
paragraph. If such failure shall have
occurred for any reason other than a default
by the Agent in the performance of its
obligations hereunder or under the
Distribution Agreement, then the Company
will reimburse such Agent or U.S. Bank
Trust, for the account of such Agent, as
applicable, on an equitable basis for the
loss of the use of funds during the period
when they were credited to the account of
the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect. In the event of a
failure to settle with respect to one or
more, but not all, of the Book-Entry Notes
to have been represented by a Global
Security, the Trustee will provide, in
accordance with Settlement
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Procedure "D," for the authentication and
issuance of a Global Security representing
the other Book-Entry Notes to have been
represented by such Global Security and will
make appropriate entries in its records.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
U.S. Bank Trust will serve as registrar in connection with the
Certificated Notes.
MATURITIES: Each Certificated Note will mature on a date
not less than one year and not more than 30
years after the date of delivery by the
Company of such Note.
PRICE TO PUBLIC: Each Certificated Note will be issued at the
percentage of principal amount specified in
the Prospectus relating to the Notes.
DENOMINATIONS: The denomination of any Certificated Note
will be a minimum of $1,000 or any amount in
excess thereof which is an integral multiple
of $1,000.
REGISTRATION: Certificated Notes will be issued only in
fully registered form.
INTEREST: GENERAL. Interest on each Certificated Note
will accrue from and including the original
issue date of, or the last date to which
interest has been paid on, such Note. Each
payment of interest on a Certificated Note
will include interest accrued to but
excluding the Interest Payment Date
(provided that, in the case of Floating Rate
Notes that reset daily or weekly, interest
payments will include interest accrued to
but excluding the Regular Record Date
immediately preceding the Interest Payment
Date) or the Maturity Date or, upon earlier
redemption, the Redemption Date, as the case
may be. Interest payable on the Maturity
Date or the Redemption Date of a
Certificated Note will be payable to the
person to whom the principal of such Note is
payable.
RECORD DATES. Unless otherwise set forth in
the applicable Pricing Supplement, the
record dates with respect to the Interest
Payment Dates shall be the Regular Record
Dates.
FIXED RATE CERTIFICATED NOTES. Unless
otherwise specified pursuant to "Settlement
Procedures" below, interest payments on
Fixed Rate Certificated Notes will be made
semi-annually on January 1 and July 1 and on
the Maturity Date or the Redemption Date;
PROVIDED, HOWEVER, that in the case of a
Fixed Rate Certificated Note issued between
a Regular Record Date and an Interest
Payment Date, the first interest payment
will be made on the
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Interest Payment Date following the next
succeeding Regular Record Date.
FLOATING RATE CERTIFICATED NOTES. Interest
payments will be made on Floating Rate
Certificated Notes monthly, quarterly,
semi-annually or annually. Unless otherwise
agreed upon, interest will be payable, in
the case of Floating Rate Certificated Notes
with a monthly Interest Payment Period, on
the third Wednesday of each month; with a
quarterly Interest Payment Period, on the
third Wednesday of March, June, September
and December of each year; with a
semi-annual Interest Payment Period, on the
third Wednesday of the two months specified
pursuant to "Settlement Procedures" below;
and with an annual Interest Payment Period,
on the third Wednesday of the month
specified pursuant to "Settlement Procedures"
below; PROVIDED, HOWEVER, that if an
Interest Payment Date for Floating Rate
Certificated Notes would otherwise be a day
that is not a Business Day with respect to
such Floating Rate Certificated Notes, such
Interest Payment Date will be the next
succeeding Business Day with respect to such
Floating Rate Certificated Notes, except in
the case of a Floating Rate Certificated
Note for which the rate base is LIBOR, if
such Business Day is in the next succeeding
calendar month, in which event such Interest
Payment Date will be the immediately
preceding Business Day; PROVIDED FURTHER,
HOWEVER, that in the case of a Floating Rate
Certificated Note issued between a Regular
Record Date and an Interest Payment Date,
the first interest payment will be made on
the Interest Payment Date following the next
succeeding Regular Record Date.
PAYMENTS OF PRINCIPAL Interest will be payable to the person in
AND INTEREST: whose name a Certificated Note is registered
at the close of business on the Regular
Record Date next preceding an Interest
Payment Date; PROVIDED, HOWEVER, that, in
the case of a Certificated Note originally
issued between a Regular Record Date and an
Interest Payment Date, the first payment of
interest will be made on the Interest
Payment Date following the next succeeding
Regular Record Date to the person in whose
name such Note was registered at the close
of business on such next Regular Record
Date. Unless other arrangements are made
acceptable to the Company, all interest
payments (excluding interest payments made
on the Maturity Date or the Redemption Date)
on a Certificated Note will be made by check
mailed to the person entitled thereto as
provided above.
U.S. Bank Trust will pay the principal
amount of each Certificated Note on the
Maturity Date upon presentation of such
Certificated Note to U.S. Bank Trust at the
principal corporate trust office of U.S.
Bank Trust in New York, New York. Such
payment, together
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with payment of interest due on the Maturity
Date, will be made from funds deposited with
U.S. Bank Trust by the Company.
U.S. Bank Trust will be responsible for
compliance with withholding taxes on
interest paid on Certificated Notes by it as
required by applicable federal law.
Within 10 days following each Regular Record
Date, the Trustee will inform the Company of
the total amount of the interest payments to
be made by the Company on the next
succeeding Interest Payment Date. The
Trustee will provide monthly to the Company
a list of the principal and interest to be
paid on Certificated Notes maturing in the
next succeeding month.
SETTLEMENT: The settlement date with respect to any
offer to purchase Certificated Notes
accepted by the Company will be a date on or
before the third Business Day next
succeeding the date of acceptance unless
otherwise agreed by the purchaser, the
Trustee and the Company and shall be
specified upon acceptance of such offer. The
Company will instruct the Trustee to effect
delivery of each Certificated Note no later
than 1:00 P.M. (New York City time) on the
settlement date to the Presenting Agent (as
defined under "Preparation of Pricing
Supplement" in Part III below) for delivery
to the purchaser.
SETTLEMENT PROCEDURES: For each offer to purchase a Certificated
Note that is accepted by the Company, the
Presenting Agent will provide (unless
provided by the purchaser directly to the
Company) by telephone and facsimile
transmission or other mutually acceptable
means the following information to the
Company:
1. Name in which such Note is to be
registered (the "Registered Owner").
2. Address of the Registered Owner and,
if different, address for payment of
principal and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount.
5. Maturity Date.
6. In the case of Fixed Rate Certificated
Note, the interest rate, or, in the
case of a Floating Rate Certificated
Note, the Initial Interest Rate (if
known at such time), Base Rate, Index
Maturity, Interest Reset Period,
Interest Reset Dates, Rate
Determination Dates, Interest Payment
Period, Spread or Spread Multiplier
(if any), Minimum Interest Rate (if
any) and Maximum Interest Rate (if
any).
A-15
7. Interest Payment Dates.
8. Redemption provisions, if any, or
provisions for the repayment or
repurchase by the Company at the
option of the Holder, if any.
9. Settlement date.
10. Issue price.
11. Agent's commission, determined as
provided in Section 2(a) of the
Distribution Agreement.
The Presenting Agent will advise the Company
of the foregoing information (unless
provided by the purchaser directly to the
Company) for each offer to purchase a
Certificated Note solicited by such Agent
and accepted by the Company in time for the
Trustee to prepare and authenticate the
required Certificated Note. Before accepting
any offer to purchase a Certificated Note to
be settled in less than three Business Days,
the Company shall verify that the Trustee
will have adequate time to prepare and
authenticate such Note. After receiving from
the Presenting Agent the details for each
offer to purchase a Certificated Note that
has been accepted by the Company, the
Company will, after recording the details
and any necessary calculations, provide
appropriate documentation to the Trustee,
including the information provided by the
Presenting Agent necessary for the
preparation and authentication of such Note.
NOTE DELIVERIES Upon receipt of appropriate documentation
AND CASH PAYMENT: and instructions, the Company will cause the
Trustee to prepare and authenticate the
pre-printed 4-ply Certificated Note packet
containing the following documents in forms
approved by the Company, the Presenting
Agent and the Trustee:
1. Note with customer receipt.
2. Stub 1 - For the Presenting Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Trustee.
Each Certificated Note shall be
authenticated on the settlement date
therefor. The Trustee will authenticate each
Certificated Note and deliver it (with the
confirmation) to the Presenting Agent (and
deliver the stubs as indicated above), all
in accordance with written or electronic
instructions (or oral instructions confirmed
in writing (which may be given by facsimile
transmission) on the next Business Day) from
the Company. Delivery by the Trustee of each
Certificated Note will be made in accordance
with said instructions
A-16
against receipts therefor and in connection
with contemporaneous receipt by the Company
from the Presenting Agent on the settlement
date in immediately available funds of an
amount equal to the issue price of such Note
less the Presenting Agent's commission.
Upon verification ("Verification") by the
Presenting Agent that a Certificated Note
has been prepared and properly authenticated
by the Trustee and registered in the name of
the purchaser in the proper principal amount
and other terms in accordance with the
aforementioned confirmation, payment will be
made to the Company by the Presenting Agent
the same day as the Presenting Agent's
receipt of the Certificated Note in
immediately available funds. Such payment
shall be made by the Presenting Agent only
upon prior receipt by the Presenting Agent
of immediately available funds from or on
behalf of the purchaser unless the
Presenting Agent decides, at its option, to
advance its own funds for such payment
against subsequent receipt of funds from the
purchaser.
Upon delivery of a Certificated Note to the
Presenting Agent, Verification by the
Presenting Agent and the giving of
instructions for payment, the Presenting
Agent shall promptly deliver such Note to
the purchaser.
In the event any Certificated Note is
incorrectly prepared, the Trustee shall
promptly issue a replacement Certificated
Note in exchange for such incorrectly
prepared Note.
FAILURE TO SETTLE: If the Presenting Agent, at its own option,
has advanced its own funds for payment
against subsequent receipt of funds from the
purchaser, and if the purchaser shall fail
to make payment for the Certificated Note on
the settlement date therefor, the Presenting
Agent will promptly notify the Trustee and
the Company by telephone, promptly confirmed
in writing (but no later than the next
Business Day). In such event, the Company
shall promptly provide the Trustee with
appropriate documentation and instructions
consistent with these procedures for the
return of the Certificated Note to the
Trustee and the Presenting Agent will
promptly return the Certificated Note to the
Trustee. Upon (i) confirmation from the
Trustee in writing (which may be given by
facsimile transmission) that the Trustee has
received the Certificated Note and upon (ii)
confirmation from the Presenting Agent in
writing (which may be given by facsimile
transmission) that the Presenting Agent has
not received payment from the purchaser (the
matters referred to in clauses (i) and (ii)
are referred to hereinafter as the
"Confirmations"), the Company will promptly
A-17
pay to the Presenting Agent an amount in
immediately available funds equal to the
amount previously paid by the Presenting
Agent in respect of such Note. Assuming
receipt of the Certificated Note by the
Trustee and of the Confirmations by the
Company, such payment will be made on the
settlement date, if reasonably practical,
and in any event not later than the Business
Day following the date of receipt of the
Certificated Note and Confirmations. If a
purchaser shall fail to make payment for the
Certificated Note for any reason other than
the failure of the Presenting Agent to
provide the necessary information to the
Company as described above for settlement or
to provide a confirmation to the purchaser
within a reasonable period of time as
described above or otherwise to satisfy its
obligation hereunder or in the Distribution
Agreement, and if the Presenting Agent shall
have otherwise complied with its obligations
hereunder and in the Distribution Agreement,
the Company will reimburse the Presenting
Agent on an equitable basis for its loss of
the use of funds during the period when they
were credited to the account of the Company.
Immediately upon receipt of the Certificated
Note in respect of which the failure
occurred, the Trustee will void such Note,
make appropriate entries in its records and
send such cancelled Note to the Company; and
upon such action, the Certificated Note will
be deemed not to have been issued,
authenticated and delivered.
PART III: ADMINISTRATIVE PROCEDURES APPLICABLE TO BOTH
BOOK-ENTRY NOTES AND CERTIFICATED NOTES
CALCULATION OF INTEREST: FIXED RATE NOTES. Interest on Fixed Rate
Notes (including interest for partial
periods) will be calculated on the basis of
a 360-day year of twelve thirty-day months.
(Examples of interest calculations are as
follows: The period from August 15, 1990 to
February 15, 1991 equals 6 months and 0
days, or 180 days; the interest payable
equals 180/360 times the annual rate of
interest times the principal amount of the
Note. The period from September 17, 1990 to
February 15, 1991 equals 4 months and 28
days, or 148 days; the interest payable
equals 148/360 times the annual rate of
interest times the principal amount of the
Note.)
FLOATING RATE NOTES. Interest rates on
Floating Rate Notes will be determined as
set forth in the form of such Notes.
Interest on Floating Rate Notes will be
calculated on the basis of actual days
elapsed and a year of 360 days except that,
in the case of Floating Rate Notes for which
the rate base is the Treasury Rate, interest
A-18
will be calculated on the basis of the
actual number of days in the year.
PROCEDURE FOR RATE The Company and the Agents will discuss
SETTING AND POSTING: from time to time the aggregate amount of,
the issuance price of, and the interest
rates to be borne by, Notes that may be sold
as a result of the solicitation of offers by
the Agents. If the Company decides to set
prices of, and rates borne by, any Notes in
respect of which the Agents are to solicit
offers (the setting of such prices and rates
to be referred to herein as "posting") or if
the Company decides to change prices or
rates previously posted by it, it will
promptly advise the Agents of the prices and
rates to be posted.
ACCEPTANCE OF OFFERS: If the Company posts prices and rates as
provided above, each Agent as agent for and
on behalf of the Company, shall promptly
accept offers received by such Agent to
purchase Notes at the prices and rates so
posted, subject to (i) any instructions from
the Company received by such Agent
concerning the aggregate principal amount of
such Notes to be sold at the prices and
rates so posted or the period during which
such posted prices and rates are to be in
effect, (ii) any instructions from the
Company received by such Agent changing or
revoking any posted prices and rates, (iii)
compliance with the securities laws of the
United States and all other jurisdictions
and (iv) such Agent's right to reject any
such offer as provided below.
If the Company does not post prices and
rates and an Agent receives an offer to
purchase Notes or, if while posted prices
and rates are in effect, an Agent receives
an offer to purchase Notes on terms other
than those posted by the Company, such Agent
will promptly advise the Company of each
such offer other than offers rejected by
such Agent as provided below. The Company
will have the sole right to accept any such
offer to purchase Notes. The Company may
reject any such offer in whole or in part.
Each Agent may, in its discretion reasonably
exercised, reject any offer to purchase
Notes received by it in whole or in part.
PREPARATION OF If any offer to purchase a Note is accepted
PRICING SUPPLEMENT: by the Company, the Company, with the
approval of the Agent that presented such
offer (the "Presenting Agent"), will prepare
a pricing supplement (a "Pricing
Supplement") reflecting the terms of such
Note and will arrange to have a copy
electronically filed with the Commission in
accordance with the applicable paragraph of
Rule 424 under the Act and the provision of
Regulation S-T thereunder and will supply at
least 10 copies thereof (or additional
copies if requested) to the Presenting
Agent. The Presenting Agent
A-19
will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser
of such Note.
In each instance that a Pricing Supplement
is prepared, the Agents will affix the
Pricing Supplement to Prospectuses prior to
their use. Outdated Pricing Supplements
(other than those retained for files) will
be destroyed.
PROCEDURES FOR When the Company has determined to change
RATE CHANGES: the interest rates of Notes being offered,
it will promptly advise the Agents and the
Agents will forthwith suspend solicitation
of offers. The Agents will telephone the
Company with recommendations as to the
changed interest rates. At such time as the
Company has advised the Agents of the new
interest rates, the Agents may resume
solicitation of offers. Until such time only
"indications of interest" may be recorded.
SUSPENSION OF SOLICITATION; The Company may instruct the Agents to
AMENDMENT OR SUPPLEMENT suspend at any time, for any period of time
OF PROSPECTUS: or permanently, the solicitation of offers
to purchase Notes. Upon receipt of such
instructions from the Company, the Agents
will forthwith suspend solicitation of
offers to purchase Notes from the Company
until such time as the Company has advised
them that such solicitation may be resumed.
If the Company decides to amend or
supplement the Registration Statement (as
defined in Section 1(c) of the Distribution
Agreement) or the Prospectus (except for a
supplement relating to an offering of
securities other than the Notes), it will
promptly advise the Agents and the Trustee
and will furnish the Agents and the Trustee
with the proposed amendment or supplement in
accordance with the terms of, and its
obligations under, the Distribution
Agreement. The Company will, consistent with
such obligations, promptly advise each Agent
and the Trustee whether orders outstanding
at the time each Agent suspends solicitation
may be settled and whether copies of such
Prospectus and Prospectus Supplement as in
effect at the time of the suspension,
together with the appropriate Pricing
Supplement, may be delivered in connection
with the settlement of such orders. The
Company will have the sole responsibility
for such decision and for any arrangements
that may be made in the event that the
Company determines that such orders may not
be settled or that copies of such
Prospectus, Prospectus Supplement and
Pricing Supplement may not be so delivered.
The Company will file with the Commission
for filing therewith any supplement to the
Prospectus relating to the Notes, provide
the Agents with copies of any such
supplement, and confirm to the
A-20
Agents that such supplement has been filed
with the Commission pursuant to the
applicable paragraph of Rule 424.
CONFIRMATION: For each offer to purchase a Note solicited
by an Agent and accepted by or on behalf of
the Company, the Presenting Agent will issue
a confirmation to the purchaser, with a copy
to the Company, setting forth the details
set forth above and delivery and payment
instructions.
TRUSTEE/PAYING AGENT Nothing herein shall be deemed to require
NOT TO RISK FUNDS: the Trustee or Paying Agent to risk or
expend its own funds in connection with any
payment to the Company, DTC, the Agents or
the purchaser or a holder, it being
understood by all parties that payments made
by the Trustee/Paying Agent to the Company,
DTC, the Agents or a purchaser or holder
shall be made only to the extent that funds
are provided to the Trustee/Paying Agent for
such purpose.
AUTHENTICITY The Company will cause the Trustee to
OF SIGNATURES: furnish the Agents from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents who
has been authorized by the Trustee to
authenticate Notes, but the Agents will have
no obligation or liability to the Company or
the Trustee in respect of the authenticity
of the signature of any officer, employee or
agent of the Company or the Trustee on any
such Note.
PAYMENT OF EXPENSES: Each Agent shall forward to the Company, on
a monthly basis, a statement of the
reasonable out-of-pocket expenses incurred
by such Agent during that month which are
reimbursable to it pursuant to the terms of
the Distribution Agreement. The Company will
remit payment to the Agents currently on a
monthly basis.
DELIVERY OF PROSPECTUS: A copy of the Prospectus, Prospectus
Supplement and Pricing Supplement relating
to a Note must accompany or precede the
earliest of any written offer of such Note,
confirmation of the purchase of such Note or
payment for such Note by its purchaser. If
notice of a change in the terms of the Notes
is received by an Agent between the time an
order for a Note is placed and the time
written confirmation thereof is sent by such
Agent to a customer or his agent, such
confirmation shall be accompanied by a
Prospectus, Prospectus Supplement and
Pricing Supplement setting forth the terms
in effect when the order was placed. Subject
to "Suspension of Solicitation; Amendment or
Supplement of Prospectus" above, each Agent
will deliver a Prospectus, Prospectus
Supplement and Pricing Supplement as herein
described with respect to each Note sold by
it.
A-21
EXHIBIT B
TERMS AGREEMENT
Central Xxxxxx Gas & Electric Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxx 00000-0000
Attention:
Subject in all respects to the terms and conditions of the Distribution
Agreement (the "Distribution Agreement"), dated ____________ __, ____ among
_____________________, _____________________, ________________________, and
Central Xxxxxx Gas & Electric Corporation (the "Company"), the undersigned
agrees to purchase the following principal amount of the Company's
_______________ Medium-Term Notes, Series __ (the "Notes"):
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Purchase Price: % of Principal Amount [plus accrued interest from
______________, 199 ]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
B-1
Modification, if any, in the
requirements to deliver the
documents specified in Section
6(b) of the Distribution
Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the
Distribution Agreement:
Book-Entry Notes or
Certificated Notes:
This Agreement shall be governed by and construed in accordance with the
laws of New York.
[Insert name of Purchaser[s]]
By ________________________
Title:
Accepted: ______________, _____
CENTRAL XXXXXX GAS & ELECTRIC
CORPORATION
By __________________________
Title:
B-2
